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Those who cannot remember the past are condemned to repeat it. We have seen this movie before. This crisis is going to play out exactly like the dot com bust of 2000.
Phase one of the selloff is now over. It was precipitated by a enticipation of a shift in fed monitory policy which resulted in the unwinding of a myriad of leveraged strategies. Just like 2018 when the market sold off about 20%on expectation of QT. Now we are going to be trading range between 4300 to 3800 for a couple of months.
June is the beginning of QT. This will mark the beginning of phase 2. There will be a periodic and systematic tightening of liquidity and hence a gradual increase in long-term yields. They will probably reach 4% by December. The market will be down additional 400 points to a near pre covid high of 3400.
And the new year will bring the news of recession and financial crisis in credit and private equity markets. By the middle of 2023 market will reach a covid low of 2500. From there it will start to rise again and will reach 4800 again in 2030.
If this sounds farfetched this is exactly how it played out from 2000 to 2013
Those who cannot remember the past are condemned to repeat it. We have seen this movie before. This crisis is going to play out exactly like the dot com bust of 2000.
Phase one of the selloff is now over. It was precipitated by a enticipation of a shift in fed monitory policy which resulted in the unwinding of a myriad of leveraged strategies. Just like 2018 when the market sold off about 20%on expectation of QT. Now we are going to be trading range between 4300 to 3800 for a couple of months.
June is the beginning of QT. This will mark the beginning of phase 2. There will be a periodic and systematic tightening of liquidity and hence a gradual increase in long-term yields. They will probably reach 4% by December. The market will be down additional 400 points to a near pre covid high of 3400.
And the new year will bring the news of recession and financial crisis in credit and private equity markets. By the middle of 2023 market will reach a covid low of 2500. From there it will start to rise again and will reach 4800 again in 2030.
If this sounds farfetched this is exactly how it played out from 2000 to 2013
Since you seem to have an idea of where the market is headed, I assume you are shorting it.
Since you seem to have an idea of where the market is headed, I assume you are shorting it.
I play the volatility. Sell vol when it is high and buy vol when it is low. Gives me a much better margin of error. We, humans, are very predictably unpredictable . and that's what vol represent
I play the volatility. Sell vol when it is high and buy vol when it is low. Gives me a much better margin of error. We, humans, are very predictably unpredictable . and that's what vol represent
I think I need to explain myself. All these numbers look like I just pulled out my ...... u know what . Regardless of what you may think markets are much more predictable in the very long term and very very near term. It's the timezone in the middle which is the real zone of uncertainty and how one navigates that decides one financial health.
The S&P in the long run historically has given a 10% return pa. That's why people like MJ consistently advocate a diversified portfolio and maintain discipline. This approach is a winner as long as you have an investment horizon of more than a decade at least and are able to handle large drawdowns. S&P return rate of 10% means that the index doubles around every 7 years. taking the low of 666 in 2009 by 2023 it would double by 2 times i.e 4 * 666 = 2664. Now you may ask why choose the bottom of the range. Because every business cycle starts with debt expansion and ends with deleveraging. COVID precipitated the steepest expansion and now inflation is precipitating steep deleveraging. Basically, we are experiencing an accelerated business cycle.
The very very near term is governed by technicals because most of the trading is done by computers. Computers are not random they are pseudo-random. They leave clear patterns in the price action and hence the near-term reading charts are an absolute must. And the charts are saying that we are entering a trading range with the top governed by 50 days moving average which is 4300.
You can play either time horizon just don't get caught in the middle.
Last edited by confusedOldy; 05-15-2022 at 11:42 AM..
I think I need to explain myself. All these numbers look like I just pulled out my ...... u know what . Regardless of what you may think markets are much more predictable in the very long term and very very near term. It's the timezone in the middle which is the real zone of uncertainty and how one navigates that decides one financial health.
The S&P in the long run historically has given a 10% return pa. That's why people like MJ consistently advocate a diversified portfolio and maintain discipline. This approach is a winner as long as you have an investment horizon of more than a decade at least and are able to handle large drawdowns. S&P return rate of 10% means that the index doubles around every 7 years. taking the low of 666 in 2009 by 2023 it would double by 2 times i.e 4 * 666 = 2664. Now you may ask why choose the bottom of the range. Because every business cycle starts with debt expansion and ends with deleveraging. COVID precipitated the steepest expansion and now inflation is precipitating steep deleveraging. Basically, we are experiencing an accelerated business cycle.
The very very near term is governed by technicals because most of the trading is done by computers. Computers are not random they are pseudo-random. They leave clear patterns in the price action and hence the near-term reading charts are an absolute must. And the charts are saying that we are entering a trading range with the top governed by 50 days moving average which is 4300.
You can play either time horizon just don't get caught in the middle.
Past performance does not guarantee future returns.
Those who cannot remember the past are condemned to repeat it. We have seen this movie before. This crisis is going to play out exactly like the dot com bust of 2000.
Phase one of the selloff is now over. It was precipitated by a enticipation of a shift in fed monitory policy which resulted in the unwinding of a myriad of leveraged strategies. Just like 2018 when the market sold off about 20%on expectation of QT. Now we are going to be trading range between 4300 to 3800 for a couple of months.
June is the beginning of QT. This will mark the beginning of phase 2. There will be a periodic and systematic tightening of liquidity and hence a gradual increase in long-term yields. They will probably reach 4% by December. The market will be down additional 400 points to a near pre covid high of 3400.
And the new year will bring the news of recession and financial crisis in credit and private equity markets. By the middle of 2023 market will reach a covid low of 2500. From there it will start to rise again and will reach 4800 again in 2030.
If this sounds farfetched this is exactly how it played out from 2000 to 2013
"The dot-com bubble didn't spread much beyond the world of the Internet and so was the ensuing recession was the country's second shortest and second shallowest" The Accidental Superpower, pp106.
So, IMO, we have not seen this movie before. The greatest period of prosperity ever in the world was 1990 - 2005. The world was awash with money and credit owing to the age of the Baby Boomers, who had reached their peak earning power at ages 45 to 60*.
That time is now passed, and will not return. Future generations will be taxed and burdened with providing for the elderly in almost every country.
I can't say as I know much about your price points and time and so forth, but I have been assuming a down market for a few weeks and I think it will last a very long time. Individual stocks, however, may do well.
I play the volatility. Sell vol when it is high and buy vol when it is low. Gives me a much better margin of error. We, humans, are very predictably unpredictable . and that's what vol represent
Sounds much like how the Elliott Wave Theory works.
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. and that's what vol represent
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